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A system is a set of components (subsystems) that operate together to achieve certain objectives. The objectives of a system are realized in its outputs. An information system is a system that accepts data resources as input and processes them into information products as output.
An information system depends on the resources of people (end users and IS specialists), hardware (machines and media), software (programs and procedures), data (data and knowledge basis), and networks (communications media and network support) to perform input, processing, output, storage, and control activities that convert data resources into information products.

This information system model highlights the relationships among the components and activities of information systems. It provides a framework that emphasizes four major concepts that can be applied to all types of information systems:

People, hardware, software, data, and networks are the five basic resources of information systems.

People resources include end users and IS specialists, hardware resources consist of machines and media, software resources include both programs and procedures, data resources can include data and knowledge bases, and network resources include communications media and networks.

Data resources are transformed by information processing activities into a variety of information products for end users.

People are required for the operation of all information systems. These people resources include end users and IS specialists.

End users (also called users or clients) are people who use an information system or the information it produces. They can be accountants, salespersons, engineers, clerks, customers, or managers. Most of us are information system end users.

IS Specialists are people who develop and operate information systems. They include systems analysts, programmers, computer operators, and other managerial technical, and clerical IS personnel. Briefly, systems analysts design information systems based on the information requirements of end uses, programmers prepare computer programs based on the specifications of systems analysts, and computer operators operate large computer systems.

2. Hardware Resources

The concept of Hardware resources includes all physical devices and materials used in information processing. Specially, it includes not only machines, such as computers and other equipment, but also all data media, that is, all tangible objects on which data is recorded, from sheets of paper to magnetic disks. Example of hardware in computer-based information systems are:

Computer peripherals, which are devices such as a keyboard or electronic mouse for input of data and commands, a video screen or printer for output of information, and magnetic or optical disks for storage of data resources.

3. Software Resources

The concept of Software Resources includes all sets of information processing instructions. This generic concept of software includes not only the sets of operating instructions called programs, which direct and control computer hardware, but also the sets of information processing instructions needed by people, called procedures.
It is important to understand that even information systems that don’t use computers have a software resource component. This is true even for the information systems of ancient times, or the manual and machine-supported information systems still used in the world today. They all require software resources in the form of information processing instructions and procedures in order to properly capture, process, and disseminate information to their users.
The following are the examples of software resources:

System Software, such as an operating system program, which con controls and supports the operations of a computer system.

Application Software, which are programs that direct processing for a particular use of computers by end users. Examples are a sales analysis program, a payroll program, and a work processing program.

Procedures, which are operating instructions for the people who will use an information system. Examples are instructions for filling out a paper form or using a software package.

4. Data Resources
Data is more than the raw material of information systems. The concept of data resources has been broadened by managers and information systems professionals. They realize that data constitutes a valuable organization resource. Thus, you should view data as data resources that must be managed effectively to benefit all end users in an organization.
Data can take many forms, including traditional alphanumeric data, composed of numbers and alphabetical and other characters that describe business transactions and other events and entities. Text data, consisting of sentences and paragraphs used in written communications; image data, such as graphic shapes and figures; and audio data, the human voice and other sounds, are also important forms of data.
The data resources of information systems are typically organized into:

Database that hold processed and organized data.

Knowledge bases that hold knowledge in variety of forms such as facts, rules, and case examples about successful business practices.

For example, data about sales transactions may be accumulated and stored in a sales database for subsequent processing that yields daily, weekly, and monthly sales analysis reports for management. Knowledge bases are used by knowledge management systems and expert systems to share knowledge and give expert advice on specific subjects.Data Vs Information: The word data is the plural of datum, though data commonly represents both singular and plural forms. Data are raw facts or observations, typically about physical phenomena or business transactions. For example, a spacecraft launch or the sale of an automobile would generate a lot of data describing those events. More specifically, data are objective measurements of the attributes (the characteristics) of entities (such as people, places, things, and events).
Example: A spacecraft launch generates vast amounts of data. Electronic transmissions of data (telemetry) form thousands of sensors are converted to numeric and text data by computers. Voice and image data are also captured through video and radio monitoring of the launch by mission controllers. Of course, buying a car or an airline ticket also produces a lot of data. Just think of the hundreds of facts needed to describe the characteristics of the car you want and its financing, or the details for even the simplest airline reservation.
Peoples often use the terms data and information interchangeably. However, it is better to view data as raw material resources that are processed into finished information products. Then we can define information as data that have been converted into a meaningful and useful context for specific end users. Thus, data are usually subjected to a value-added process (we call data processing or information processing) where (1) its form is aggregated, manipulated, and organized; (2) its content is analyzed and view information as processed data placed in a context for human user. So you should view information as processed data placed in a context that gives it value for specific end users.
Example: Names, quantities, and dollar amounts recorded on sales forms represent data about sales transactions. However, a sales manager may not regard these as information. Only after such facts are properly organized and manipulated can meaningful sales information be furnished, specifying, for example, the amount of sales by product type, sales territory, or sales persons.5. Network Resources
Telecommunications networks like the Internet, intranets, and extranets have become essential to the successful operations of all types of organizations and their computer-based information systems. Telecommunications networks consist of computers, communications processors, and other devices interconnected by communications media and controlled by communications software. The concept of Network resources emphasizes that communications networks are a fundamental resource component of all information systems. Network resources include:

Network Support, This generic category includes all of the people, hardware, software, and data resources that directly support the operation and use of a communications network. Examples include communications control software such as network operating systems and Internet packages.

In summary, these five components together make up the five component framework, which are the five fundamental components of an information system. First you will need the hardware in order to start off your system. Then you must use the software in order to run you hardware. After you have set up your hardware and loaded up the software to run it, you will need data to input into your hardware. Once you have your data ready you will need procedures set in play to properly store your data within the system, and last you will need people in order to put in the data and keep the system up and running properly at all times. As you can see, you will need every component in order to ensure that you have a functional running information system.